Iconic part of Atlanta’s skyline seized due to default

Six office towers and an underground shopping mall in downtown Atlanta are back in the hands of their lenders after the landlord defaulted on a loan, a foreclosure that indicates continued uncertainty in the office space market since the pandemic prompted much of the American workforce to work from home.

The Atlanta Journal-Constitution reports that Miami-based Banyan Street Capital owed more than $125 million on parts of the Peachtree Center complex, a cornerstone of downtown Atlanta.

Banyan Street’s ability to repay its loans may have been compromised after Truist Financial Corp. left two of the towers in 2021 during office consolidation. The bank accounted for more than a fifth of Peachtree Center’s rent, according to a report by investment firm Morningstar. The report says that in April, buildings were nearly 40% vacant, compared to an overall vacancy rate of 21% in Atlanta-area offices.

The foreclosure auction was held on the steps of the Fulton County Courthouse on Tuesday, where an investor offered just $1.5 million in cash. But the lenders represented by Situs AMC put up $127.5 million representing the debt Banyan Street owed them, and that exceeded the measly cash offer. Investors bought a commercial mortgage-backed security to lend the money to Banyan Street, and Tuesday’s offer leaves them with the buildings rather than the cash.

“I hope this isn’t some kind of harbinger of things to come,” AJ Robinson, president of Central Atlanta Progress and the Atlanta Downtown Improvement District, told the newspaper.

The change in ownership is unlikely to affect current tenants, as their leases have not expired. More tenants could move out at the end of their lease. The Peachtree Center also includes the Marriott Marquis and Hyatt Regency convention hotels, the merchandise store now known as AmericasMart and other buildings, none of which were part of Tuesday’s lockdown.

Banyan Street has spent millions upgrading the complex’s buildings and mall designed by Atlanta developer and architect John C. Portman Jr., and said it remains fully committed to other downtown properties. of Atlanta that he still owns, including another office tower, a residential project and several parking lots.

This story was originally published September 7, 2022 12:04 p.m.

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